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The price decline of DRAMs appears to be ending as spot market prices for double data rate 3 (DDR3) DRAM have increased, while contract prices have stabilized, according to market researcher DRAMeXchange in Taiwan.
DRAM prices have been falling for months because of overcapacity and sluggish demand. However, in the second half of September, the average spot market price for a DDR3 1333 MHz 2 GB chip increased 9.1 percent from $1.10 to $1.20, according to DRAMeXchange.
Spot market price increases have impacted contract negotiations for DRAM. In the second half of September, the average contract price for DDR3 2 GB modules held steady at about $10.50, DRAMeXchange reported.
DRAM demand is likely to increase over the next several weeks because of lower to stable prices, inventory replenishment, increased PC demand by consumers for the upcoming holiday season, and an increase in DRAM content in notebook computers.
It is expected that DRAM content per notebook will increase 5.8 percent to 3.7 GB per unit in the fourth quarter compared to the third, according to DRAMeXchange.
However, the current DRAM market is still in the state of oversupply, so whether prices will continue to stabilize and decline depends on future market demand, DRAMeXchange reported.
While DDR3 2 GB chips are the current mainstream memory, the rise of ultrabooks in 2012 will mean that more 4 GB DRAMs will ship. DRAM makers have already accelerated the transition to the higher density chips.
Ultrabook have a thickness requirement of 18-21 mm. Because of this space limitation, PC OEMs need to transition from small outline, dual in-line memory modules (SO-DIMM) to on-board modules, and 2 GB chips need to be replaced by 4 GB chips, according to DRAMeXchange. Demand for 4 GB chips will also be strong from the server market.
Korean makers are leading the pack in DDR3 4 GB development as usual. Samsung began mass production of 4 GB DDR3 in the second quarter, and Hynix plans to begin production at the end of the fourth quarter this year. Elpida, Micron, Nanya, and Winbond are all transitioning to 4 GB DDR3 chips.